Clean Coal: AEP Ups Expectations for Carbon Capture and Storage

What does it take to get Steven “Coal is My Worst Nightmare” Chu and Mike “I Quite Like Coal” Morris singing from the same hymnal?

A successful clean-coal project, it seems.

Our colleague Becky Smith reports in The Wall Street Journal today that American Electric Power boss Mike Morris is thrilled by the early progress on its first carbon-capture project in West Virginia, which has “exceeded expectations.” Now, the sky’s the limit:

As a result, he believes AEP will be able to retire 25% of its coal-burning power plants and install advanced carbon-capture equipment on the remaining 75%. “This still is an extremely expensive undertaking, but the answer is near at hand,” said Mr. Morris in an interview Tuesday.

Energy Secretary Steven Chu said in October that he expects the U.S. to deploy carbon-capture technology over the next decade. AEP talks of overhauling its coal fleet by 2025.

Carbon capture technology lets coal plants (and other big emitters, from petrochemical complexes to cement factories) capture and bury their carbon-dioxide emissions. The problem is that the technology is very expensive and only exists at demonstration level in a handful of plants around the world.

Especially striking in Mr. Morris’ optimism is the economics. Based on early experiences with AEP’s Mountaineer plant in West Virginia, Mr. Morris figures the company can do clean coal at a modest cost: an additional four cents per kilowatt hour. He also says the pilot plant, which right now only captures 2% of the plant’s emissions, suffers a much smaller “energy penalty” than expected.

AEP’s outlook for the cost of clean coal stands in contrast to estimates published earlier this year by Harvard’s Belfer Center. They figured the first generation of clean coal plants would add 8 cents to 12 cents per kilowatt hour. Only when clean coal is up and running around the world would the additional costs come down to between 2 cents and 5 cents, Belfer estimated.

That could suggest that early clean-coal programs, such as AEP’s Mountaineer plant, are making the learning curve less steep—which would make wider deployment of the technology easier and cheaper. (No small benefit, given the magnitude of the clean-coal challenge.)

On the other hand, AEP’s bullishness on the viability of clean coal could also be part of a strategy to make sure that Washington invests heavily in clean-coal technology and offers cash premiums for storing the stuff, even as policy makers are threatening drastic environmental regulation of big polluters (and AEP is the nation’s biggest carbon-dioxide emitter).

As the WSJ notes, Mr. Morris’ announcement came just one day after the Environmental Protection Agency confirmed its authority to regulate greenhouse-gas emissions—something many businesses and especially the power industry dread.

Comments (4 of 4)

"Mr. Morris figures the company can do clean coal at a modest cost: an additional four cents per kilowatt hour."

4 c per kWh is not modest; it is about 70% more than the current cost of power production at coal power plants (if one does not impute a carbon tax to the production cost, that is).

That said, clean coal, os oxymoronic as the term sounds, might still be the one of the best of the worst options we have, given that our dependence on coal as the primary power generation fuel will last for at least the next few decades.

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Environmental Capital provides daily news and analysis of the shifting energy and environmental landscape. The Wall Street Journal’s Keith Johnson is the lead writer. Environmental Capital is led by Journal energy reporter Russell Gold, and includes contributions from other writers at the Journal, WSJ.com, and Dow Jones Newswires. Write us at environmentalcapital@wsj.com.